Rising rates strain sovereign debt
20d
Governments worldwide faced sharply higher borrowing costs as long-term interest rates climbed to two-decade highs, raising fears of a strain on sovereign debt sustainability.
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by Menzie Chinn
September 24, 2026 at 7:56 PM
From the FT: "Surging government bond yields are a “major concern” to countries’ public finances given the mounting share of spending being consumed by debt interest, the OECD said on Wednesday."
This warning comes as the OECD raises its inflation forecasts and warns about interest rate pressures.
This warning comes as the OECD raises its inflation forecasts and warns about interest rate pressures.
September 23, 2026 at 11:00 AM
From the FT: "Surging government bond yields are a “major concern” to countries’ public finances given the mounting share of spending being consumed by debt interest, the OECD said on Wednesday."
This warning comes as the OECD raises its inflation forecasts and warns about interest rate pressures.
This warning comes as the OECD raises its inflation forecasts and warns about interest rate pressures.
by Menzie Chinn
Increased US govt bond issuance, & prospects thereof, colliding with lackluster official sector demand (i.e., central banks); Increased deficits due to higher interest rates that are likely to persist indefinitely (r > g) Elevated elevated uncertainty regarding US macro policy mix can't help, too...
September 24, 2026 at 8:46 PM
Increased US govt bond issuance, & prospects thereof, colliding with lackluster official sector demand (i.e., central banks); Increased deficits due to higher interest rates that are likely to persist indefinitely (r > g) Elevated elevated uncertainty regarding US macro policy mix can't help, too...
Three of my takeaways from this Financial Times reporting (attached) on record bond issuance by emerging economies:
It adds at the margin to pressures on global bond yields, even though the overall issuance volumes remain significantly smaller than those coming from advanced economies...
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It adds at the margin to pressures on global bond yields, even though the overall issuance volumes remain significantly smaller than those coming from advanced economies...
1 of 3
September 24, 2026 at 1:52 PM
Three of my takeaways from this Financial Times reporting (attached) on record bond issuance by emerging economies:
It adds at the margin to pressures on global bond yields, even though the overall issuance volumes remain significantly smaller than those coming from advanced economies...
1 of 3
It adds at the margin to pressures on global bond yields, even though the overall issuance volumes remain significantly smaller than those coming from advanced economies...
1 of 3
Reposted by Daniel W. Drezner
Reuters: “Long-dated US borrowing costs climbed to their highest level in more than 20 years on Thursday as the months-long selloff in bond markets gathered pace.”
US 30-year bond yield rises to highest since 2004 as selloff deepens
Long-dated US borrowing costs climbed to their highest level in more than 20 years on Thursday as the months-long selloff in bond markets gathered pace.
www.reuters.com
September 24, 2026 at 11:13 AM
Reuters: “Long-dated US borrowing costs climbed to their highest level in more than 20 years on Thursday as the months-long selloff in bond markets gathered pace.”
What are the effects of currency crises on the long-run economic growth? The answer is in this publication: doi.org/10.1080/13504850701...
September 24, 2026 at 7:00 AM
What are the effects of currency crises on the long-run economic growth? The answer is in this publication: doi.org/10.1080/13504850701...
Reposted by Mark Rice, Melissa Terras
- Honestly my dear grandchildren, you’ll never believe how low rates were in the 2010s.
- at least you built a load of infrastructure when borrowing costs were so low grandad? Right? Right?
- at least you built a load of infrastructure when borrowing costs were so low grandad? Right? Right?
September 24, 2026 at 11:18 AM
- Honestly my dear grandchildren, you’ll never believe how low rates were in the 2010s.
- at least you built a load of infrastructure when borrowing costs were so low grandad? Right? Right?
- at least you built a load of infrastructure when borrowing costs were so low grandad? Right? Right?
Bond Yields Make Biggest One-Day Jump Since Trump’s Tariffs Rattled Markets
www.nytimes.com/2026/09/23/b...
www.nytimes.com/2026/09/23/b...
Bond Yields Soar as Investors Foresee Another Fed Interest Rate Increase
The 10-year Treasury yield on Wednesday rose to around 5.1 percent, as investors increasingly expect the Fed Reserve will raise interest rates again.
www.nytimes.com
September 24, 2026 at 7:54 AM
Bond Yields Make Biggest One-Day Jump Since Trump’s Tariffs Rattled Markets
www.nytimes.com/2026/09/23/b...
www.nytimes.com/2026/09/23/b...
In 1990, the US had ~130 tax coupons (credits, adjustments, deductions, etc), today we have more than double that: 271. To address the debt, we should start with the coupon book that doles out $2.3 trillion in discounts each year, dwarfing Social Security.
www.bloomberg.com/opinion/arti...
www.bloomberg.com/opinion/arti...
There’s a Secret Third Path to Escaping America’s Debt Trap
The US deficit has reached $1.97 trillion and is on track to pass 6% of gross domestic product this fiscal year, the latest milestone in a remarkable deterioration of the federal budget. With national...
www.bloomberg.com
September 23, 2026 at 3:55 PM
In 1990, the US had ~130 tax coupons (credits, adjustments, deductions, etc), today we have more than double that: 271. To address the debt, we should start with the coupon book that doles out $2.3 trillion in discounts each year, dwarfing Social Security.
www.bloomberg.com/opinion/arti...
www.bloomberg.com/opinion/arti...
well, sort of. An increase in nominal rates increases interest payments(including the non-cash uplift in IGs). But to the extent it reflects higher NGDP the debt ratio reduces. And the latter (which takes time to be reflected in the published stats) seems to have been quite important..
September 23, 2026 at 12:04 PM
well, sort of. An increase in nominal rates increases interest payments(including the non-cash uplift in IGs). But to the extent it reflects higher NGDP the debt ratio reduces. And the latter (which takes time to be reflected in the published stats) seems to have been quite important..
Reposted by Steve Peers
Bonds appear to be having a moment.
Still, good to know there are safe hands on the levers of the world's reserve currency economy.
Still, good to know there are safe hands on the levers of the world's reserve currency economy.
September 23, 2026 at 4:09 PM
Bonds appear to be having a moment.
Still, good to know there are safe hands on the levers of the world's reserve currency economy.
Still, good to know there are safe hands on the levers of the world's reserve currency economy.